KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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how long should we keep our records and how best to protect them
June 23, 2026
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how long should we keep our records and how best to protect them
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Ken,
My question is about loss of records. In the past we used paper files; now a lot of companies are going to electronic files. Paper stood the test of time unless you had a fire or flood. Electronic files and data storage seems much more vulnerable, even with back up. I spoke with someone a while back who ran parallel computers so everything on one computer was on the second one. If one failed there was no loss or interruption, however, a power surge destroyed both at the same time. We use an off site backup, dual drives, one in the computer and second in a fire and water rated safe and also back up on external drives every month and store them in a separate safe. However, things happen. What if we lose our records? What are the ramifications? IRS, State, AHJ's, etc.?
And on another note, how long should we maintain records? We hear about being named in a lawsuit because we installed, repaired or serviced a fire system. What happens if ten years ago we installed a sprinkler or fire alarm system, there is a major loss, injuries or death. Attorneys (you know how they are), forensic investigators, expert witnesses, all dig through records to assign blame and get a settlement.
Jeff
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Response
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There are no guarantees in life, other than taxes and death. I suppose no matter what precaution you take you can end up losing the records, or at least the one record you need. Off site storage is recommended for duplicate record storage, especially if it's electronic. Duplicate paper records would take more effort and you might limit it to your contracts [what you'll need when you sell] and current accounting and operating records so you don't lose your A/R and other essential records. Keep in mind that many of your important records are already on file somewhere else and accessible if you need them. These would include filed tax return, licenses, leases, deeds, mortgages, bank accounts and records.
Requirements and guidelines are all over the place:
IRS wants you to retain records of earnings and withholdings for at least four years after the tax becomes due or is paid; Keep employee records for at least three years after an employee leaves the company. The 7 year rule for IRS is for filing a claim for credit or refund due to an overpayment resulting from a bad debt deduction or a loss from worthless securities; the time to make the claim is 7 years from the date the return was due.
You can be sued even beyond the statute of limitations, even though you should be able to defend the case if brought beyond the statute of limitations. But even that can be misleading because you can be brought in as a third party defendant after the statute of limitations on many types of claims where the Plaintiff in the action might be time barred but a named defendant with whom you have no privity brings you in as a party partly or entirely responsible. While the Plaintiff can't sue you the third party can. This is how you're brought into a case where you haven't been servicing for 20 years. This is called the "relations back doctrine". Unfortunately there would be no time period for holding records that might be helpful in such as situation, though I am not encouraging hoarding.
Keeping duplicate records off-site is probably the safest procedure. It's a bit easier with electronic data. Off site doesn't mean next door, but a place not likely to be involved in the same disaster as your place of business.
K&K has a record and copy of what contracts and forms you purchase from us, so we have that covered.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
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